Total assets under management (AUM) in exchange-traded funds (ETFs) recently surpassed the milestone $200-billion mark.
The figure is remarkable for a variety of reasons. Not only is it more than double the $89.5-billion in client assets held in ETFs at year-end 2015, it’s more than 10 times the $19.4-billion in AUM held in ETFs at year-end 2008.
Inflows in ETFs were on pace to surpass those of mutual funds for the second year in a row at year-end. While the $1.6-trillion of client AUM in mutual funds still dwarfs those of ETFs, the trend for the latter is upward. In one year, client assets in ETFs have gone from one-tenth to one-eighth of those in mutual funds.
There is no denying that ETFs have become the go-to investment vehicle for many Canadian financial advisors and investors.
Here are 10 articles on investing strategies using ETFs that were published on Globe Advisor this past year:
Investors seeking the benefits of an income property without the hassles of being a landlord might want to check out real estate investment trusts (REITs). But investors can become even lazier landlords if they own ETFs that hold a basket of REITs. These investments have attractive yields because they distribute most of their taxable income to unit holders.
With central banks putting the brakes on interest rates, income-seeking investors are taking a fresh look at strong dividend-paying stocks. Picking high-yielding stocks can be difficult – as some companies may not be able to continue juicy payouts – so ETFs offer a more diversified way to invest in these securities.
Water is all around us, yet it has tended to flow underground as an investment. That is, until recently, as global attention turns toward changing weather patterns. ETFs with water-related holdings have risen in value by as much as 20 per cent since the beginning of 2019. It’s hard to know exactly why, but some suggest it could be linked to growing interest in the impact of climate change.
It may be wise for investors to take some risk off the table. ETFs, with their diversified exposure to markets, can be one way for investors to hedge their bets. We asked three ETF experts for their top defensive picks.
Canadian investors love their ETFs. As their uptake continues to increase, where can financial advisors expect ETFs to go into 2020? And how can they meet the needs of ETF investors in a changing market?
The ETF death toll is rising as a record number have closed in recent years. Although investors may be dismayed to find out an ETF in their portfolio is scheduled to close, those who follow the industry closely say it hardly comes as a surprise as fund issuers look for spaces that haven’t already been covered by competitors.
For yield-thirsty investors, there’s nothing like a steady pay cheque. Although it’s common for ETFs to pay quarterly distributions, more dividend-oriented funds now offer monthly payouts. These regular payments can help investors manage their cash flow better, provide faster compounding if reinvested and offset losses during market volatility.
Investors seeking a safe haven from recession or market swoons can often find solace in consumer staples stocks. That’s because products such as groceries, toiletries and cleaning supplies are always in demand – even during a difficult economy. Companies in this space often pay healthy dividends and their shares are typically less volatile. However, the risks range from rising interest rates to company-specific challenges. As ETFs offer an easy alternative to choosing stocks, we asked three ETF experts for their top picks in this sector.
When gold glitters, it can take investors by surprise. But while the price of gold is unpredictable, owning it can help diversify a portfolio because it can move in the opposite direction of stock markets. Instead of buying bullion or gold-mining stocks – which can have some weak correlation to the market – ETFs offer easier exposure to the asset.
ETFs have evolved significantly from investments that track broad indexes to a plethora of theme-based plays such as clean energy, currency hedging and social media. ETF providers regularly introduce products that reflect market trends, such as the cannabis ETFs launched in the run-up to Canada’s legalization of recreational marijuana, or the new gender-diversity products focused on companies that show a commitment to putting women on their boards and in top leadership positions.